While it is no secret that your debts have a negative impact on your credit history, it is also important to be aware that credit inquiries can also weigh heavily against you. A credit inquiry is any time a potential lender asks for a copy of your credit report to determine your credit worthiness. Each of those inquiries is listed on your report and depending on the type and number of inquiries, the impact on your credit history can be great. However there are steps you can take to remove some of the inquiries and help repair your credit.
Know Your Types of Inquiries
All credit inquiries are removed from your credit report after two years, but not every type of credit inquiry lowers your score. Inquiries made when you establish utility service (e.g., gas, electric or phone), applications for insurance or inquiries in response to a court order have no impact on your credit score. However you will see a negative change any time a lender checks your credit for purposes of acquiring a loan, a collection agency attempts to collect a debt or a local child support agency attempts to collect child support.
Learn What Is On Your Report
Order copies of your credit report from all three major reporting agencies (Equifax, Experian and Trans Union) to discover who has inquired about your credit. Usually near the end of each report is a list of all the inquiries that have been made about your credit. Some of the inquiries will be promotional (generally made by credit card companies looking to make you an offer) and can be ignored. The inquiries to pay attention to are made by potential creditors. Hopefully you recognize and have authorized credit checks by many of the companies listed. Make a note of any companies that are unfamiliar to you.
Contact Your Lenders
There is no way to remove any authorized inquiries from your credit report. However, for any inquiries that were made without your permission, collect the addresses for the companies that made them. For most companies, the addresses can be found on your Experian report and in some cases may also be listed on your Equifax and Trans Union reports. Once you have the addresses, write letters to each inquirer asking for proof that you authorized the inquiry.
Verify The Inquiries
If a company responds that a particular inquiry was made by mistake, make three copies of the letter and send one to each of the three reporting agencies. The change should be made on your credit report within 30 days.
Sometimes a creditor will not respond. If you do not receive an answer after 30 days, have an attorney write up a more forceful letter. Threaten legal action against the creditor if need be. If you need to take a lender to small claims court, you must be able to prove what your credit score was before the inquiry was made and how it adversely affected your credit.
It is important that any correspondence between you and a lender is done through certified mail. Be sure to keep track of the dates of any and all communication. This information will be vital if legal action is necessary.
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